June 12, 2003 Oshkosh Truck (OSK)
It is late in the evening as I take to the task of scanning for a great pick for the day. This market sure does want to go up~! Probably wouldn't hurt to have a bit of a correction in here...although it is said that a bull market does climb a wall of worry.

The stock today that showed up is an old favorite of mine. Ask my buddies in Investnuts where we own a few shares...Oshkosh Truck. I also have a few shares in one of my accounts other than my trading account. So how is that for transparency?

Anyhow, Oshkosh Truck, "engineers, manufactures, and markets a broad range of fire and emergency apparatus and specialty commercial and military trucks under the Oshkosh, Pierce, McNeilus and MTM trademarks." In other words they make peacetime vehicles like firetrucks, garbage trucks, ambulances and military vehicles such as tanker trucks.

The stock had a great day trading at $62.5 up $3.11 or 5.22% on the day. Looking for news to explain the jump, the best I can see on the NYTimes on the web is that the Pacific Exchange (PCX) announced yesterday that they will begin trading options on OSK. I think there must be something more than this to explain the jump....

Anyhow, earnings look nice. On April 24, 2003, according to NYTimes on the Web, Oshkosh Truck reported their second quarter results for the period ending March 31, 2003. In a nutshell, things were solid: net income increased 16.0% to $14.1 million, or $.81/share. This compares with net income last year of $12.2 million or $.70/share. Revenue was up from $415.6 million last year to $453.4 million for the current year.

Examination of financials on Morningstar.com shows that revenue growth has been steadily improving from $0.9 billion in 1998, $1.2 billion in 1999, $1.3 billion in 2000, $1.4 billion in 2001, $1.7 billion in 2002, and $1.8 billion in the trailing twelve months.

The company even pays a SMALL dividend of $.35/share that has increased from $.33/share in 1998.

Looking at free cash flow we find that the company, while dropping a little over the last twelve months to $196 million positive from $248 million in 2002 is still spinning off lots of real money.

Current assets are at $430 million vs $385 of current liabilities, and 'long-term assets' measure $604.7 million vs $216.7 million in long-term debt.

The stock IMHO appears to be reasonably valued with a trailing p/e of 17.40. This looks like a GREAT company to me....should do well in both peace and wartime industries....and has been growing steadily since 1997 if not longer. That is why I own some of these shares....and if I had some available cash....would be happy to add to my position at this point.

Have a great evening. Drop me a line at bobsadviceforstocks@lycos.com and let me know if you like all of this commentary and if it is helpful to you. Bob